3rd Quarter 2009 Earnings Presentation September 10, 2009 Exhibit 99.1 |
Safe Harbor Statement 2 Information provided and statements contained in this presentation that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this presentation and the Company assumes no obligation to update the information included in this presentation. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or similar expressions. These statements are not guarantees of performance or results and they involve risks, uncertainties, and assumptions. For a further description of these factors, see Item 1A, Risk Factors, included within our Form 10-K for the year ended October 31, 2008, which was filed on December 30, 2008, and Item 1A, Risk Factors, included within our Form 10-Q for the period ended July 31, 2009, which was filed on September 9, 2009. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward- looking statements. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events. |
Other Cautionary Notes • The financial information herein contains audited and unaudited information and has been prepared by management in good faith and based on data currently available to the company. • Certain Non-GAAP measures are used in this presentation to assist the reader in understanding our core manufacturing business. We believe this information is useful and relevant to assess and measure the performance of our core manufacturing business as it illustrates manufacturing performance without regard to selected historical legacy costs (i.e. pension and other postretirement costs). It also excludes financial services and other expenses that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance of our operating segments. A reconciliation to the most appropriate GAAP number is included in the appendix of this presentation. 3 |
Summary • 2009 Q3 results • 2009 outlook • 2010 and beyond 4 |
Traditional U.S. and Canada Retail Sales Class 6 – 8 Industry Landscape 5 Worst truck Class 6-8 Truck industry in more than 45 years • 1991 – 225,000 • 1992 – 238,000 • 2003 – 263,000 • 2008 – 244,100 Reality: • Age of fleet increasing • Ability to finance • Used truck market • EGR vs. SCR Lowest retail industry since 1962 Lowest retail industry since 1962 Note: Industry guidance includes military orders sold to the U.S. Industry FY99 FY00 FY01 FY02 FY03 FY04 FY 05 FY06 FY 07 FY08 School Bus 33,800 33,900 27,900 27,400 29,200 26,200 26,800 28,200 24,500 24,400 21,000 23,000 Class 6-7 - Medium 126,000 129,600 96,000 72,700 74,900 99,200 104,600 110,400 88,500 59,600 34,000 42,000 Combined Class 8 (Heavy & Severe Service) 286,000 258,300 163,700 163,300 159,300 219,300 282,900 316,100 206,000 160,100 110,000 120,000 Total Industry Demand 445,800 421,800 287,600 263,400 263,400 344,700 414,300 454,700 319,000 244,100 165,000 185,000 FY 09 Historical Information United States and Canadian Class 6-8 Truck Industry - Retail SalesVolume Current 2009 Actual Guidance |
$0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 3Q07 3Q08 3Q09 With Settlement Effects 3Q09 Without Settlement Effects 0 5,000 10,000 15,000 20,000 25,000 30,000 3Q07 3Q08 3Q09 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 3Q07 3Q08 3Q09 Q3 FY09 Information 6 Consolidated Revenues ($ in millions) $3,951 $2,506 $473 $110 $115 $2,956 $92 Manufacturing Segment Profit ($ in millions) 0 20,000 40,000 60,000 80,000 100,000 120,000 3Q07 3Q08 3Q09 Quarterly Truck Shipments 27,000 17,000 24,600 Quarterly Engine Shipments 79,300 63,600 108,200 Shipments decreased ~37% Q/Q Shipments decreased ~20% Q/Q 1 1,2 1 Includes extraordinary gain of $23 million for Monaco 2 Excludes $(18) million in manufacturing segment profit and $(18) million in net income for Settlement Effects (see page 8 for additional detailed disclosure on settlement effects) Note: This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation. |
1 7 • Continue to invest in future • Containing automotive supply base risk • Military cancellation charges Q3 FY09 Information Diluted Earnings (loss) per share $(0.16) $4.47 $(0.05) $(0.42) Profit Excluding Tax ($ in millions) $18 $341 $5 $0 1 1,2 1,2 Note: This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation. 1 Includes extraordinary gain of $23 million for Monaco 2 Excludes $(18) million in manufacturing segment profit and $(18) million in net income for Settlement Effects (see page 8 for additional detailed disclosure on settlement effects) $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 $400.00 3Q07 3Q08 3Q09 With Settlement Effects 3Q09 Without Settlement Effects -$1.00 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 3Q07 3Q08 3Q09 With Settlement Effects 3Q09 Without Settlement Effects |
Impact of Settlement on 2009 8 Business Impact of Settlement • Loss of automotive U.S. customer • Less intensive capital/product requirements • Restructured business • Impact of increased equity stake in BDT & BDP (in millions) Q1 Actual Q2 Actual Q3 Actual Full Year Guidance Cash 200 $ 200 $ Warranty 75 75 Restructuring charges (58) 3 (65) +/- Other related income and (expense) (27) (35) 18 (35) +/- 190 $ (32) $ 18 $ 175 $ +/- Settlement and Related Restructuring - 2009 PBT Impact |
Medium Truck 3Q09 School Bus, Class 6-8 Market Share was 36% 61% Market Share 3Q09 35% Market Share 3Q09 33% Market Share 3Q09 Severe Service Truck* Heavy Truck 29% Market share 3Q09 • #2 in YTD July Market Share • Executing on strategy - New Products (ProStar ® , LoneStar ® ) • MaxxForce ® EGR engines • #1 In Market Share despite industry consolidation • MaxxForce ® EGR engines • #1 in Market Share • A leader in Medium Hybrid • MaxxForce ® EGR engines • #1 in Market Share • 3rd straight year of increasing market share • MaxxForce ® EGR engines FY07 60% FY08 55% 3Q09 61% YTD JUL 59% *Note: Excludes U.S. Military shipments. See market share slide in appendix for shipments with and without military shipments. FY07 36% FY08 36% 3Q09 35% YTD JUL 35% FY07 25% FY08 27% 3Q09 33% YTD JUL 34% FY07 15% FY08 19% 3Q09 29% YTD JUL 25% 9 Class 8* 30% Market Share 3Q09 School Bus School Bus & Combined Class 6-8 Market Share – FY07: 26%; FY08: 29%; 3Q09: 36%; YTD JUL: 33% |
Guidance - Industry Landscape 10 Guidance • Class 6-8 Truck Industry 2009: 165K to 185K 2010: 175K to 215K • Engine shipments – 245K to 265K • Parts – segment revenues expected to be ~$2.2B to $2.3B • Financial Services - profitable Note: Industry guidance includes military orders sold to the U.S. Industry FY99 FY00 FY01 FY02 FY03 FY04 FY 05 FY06 FY 07 FY08 School Bus 33,800 33,900 27,900 27,400 29,200 26,200 26,800 28,200 24,500 24,400 21,000 23,000 Class 6-7 - Medium 126,000 129,600 96,000 72,700 74,900 99,200 104,600 110,400 88,500 59,600 34,000 42,000 Combined Class 8 (Heavy & Severe Service) 286,000 258,300 163,700 163,300 159,300 219,300 282,900 316,100 206,000 160,100 110,000 120,000 Total Industry Demand 445,800 421,800 287,600 263,400 263,400 344,700 414,300 454,700 319,000 244,100 165,000 185,000 FY 09 Historical Information United States and Canadian Class 6-8 Truck Industry - Retail SalesVolume Current 2009 Actual Guidance |
Industry Landscape 11 • Retail sales industry landscape: – 2009 school bus and Class 6-8 Truck (industry): Q3 2009 Class 6-8 = 41,100 • Order receipt landscape – August order receipts Bus: ~4,250 Medium: ~4,250 Combined Heavy: ~9,300 – Highest month since June 2008* • Gas vs. diesel prices • Inventory • U.S. motor carrier failures Average Age U.S. Class 8 Truck Tonnage Index *Combined School Bus and Class 6-8 orders |
Severe Service Medium Heavy Bus Actual Truck Production 2009 12 Actual Expected 2008 2009 Down Days (Q3 2009 unplanned ) = 39 days |
Commodities 2009 Commodities 2009 • Reduced volatility & lessened market impact through contract structures • 2009 costs have declined with a lag to the market • Market consensus: commodity prices will continue to recover through the end of 2009 – Renegotiating contracts – Forward-locking prices – Enhancing our risk management tools and practices – Controlling more spend 13 2008 2009 2010 Market Navistar Sheet steel 2007 2008 High Aug 09 Spot $2.83 $4.09 $3.28 Copper $0.90 $1.54 $1.23 Aluminum $1,241 $2,275 $1,360 Platinum $73 $145 $72 Crude oil $315 $890 $311 Scrap steel $509 $1,125 $538 |
Full Year 2009 Guidance 14 6/9/09 9/10/09 Guidance Guidance $5.10 to $5.60 $2.80 to $3.10 Industry Volume Reduction to 210,000 to 225,000 (- - -) Industry Volume Reduction to 165,000 to 185,000 (- - -) Warranty (- -) R&D spending (-) Taxes (-) Customer Mix (-), offset by SG&A below Offsetting Actions Lower commodity Costs / cost reductions + Blue Diamond JV operational impact + Military revenue: $2.7B to $3.0B + Market Share + Parts profitability + SG&A / Below the Line items + +, offset by customer mix above Revised EPS Guidance* $2.80 to $3.10 $2.55 to $2.85 Settlement and Restructuring $2.40 +/- $2.40 +/- $5.20 to $5.50 $4.95 to $5.25 additional facility rationalization Prior EPS Guidance * Key Challenges We continue to invest today, to ensure the future Revised EPS Guidance - Including Settlement & Restructuring* * Note: Excludes settlement and related restructuring as well as potential Note: This slide contains non-GAAP information, please see the Reg G in appendix for detailed reconciliation |
Full Year 2009 Guidance 15 *Note: This slide contains non-GAAP information, please see the Reg G in appendix for detailed reconciliation |
2009 Summary We expect to deliver EPS* of $4.95 to $5.25, while continuing to invest in the future 16 • Product development • Global growth • Product enhancements *Includes Ford settlement effects |
Actions in 2009 for 2010 and Beyond • Truck strategy – U.S. and Canada – Environmental strategy – Mahindra – Cat J.V. pending – Monaco – Commercial bus – Military • Engine strategy – MaxxForce ® Big Bore – Global and domestic expansion – EGR – Engine platform rationalization – Manage supply chain risk • Corporate – Pension – Capital structure 17 |
0% 5% 10% 15% 20% 25% 30% 35% FY 2007 Retail Share FY 2008 Retail Share 3Q09 Retail Share 3Q09 Order Share Combined Class 8* Retail Market Share Order Receipt Share Actions in 2009 for 2010 and Beyond Profitable Growth: Class 8 *Excludes U.S. Military shipments 18 |
Current status: • More than 18 months of testing between engine labs and field test units • 60 test vehicles in operation today • Validation testing includes: – High-altitude and high-temperature testing in Nevada and mountainous regions of Colorado – Cold weather testing conducted this past March in northern Minnesota – We will continue to test, validate and make necessary calibration adjustments this winter Next steps: • Customer units delivered this fall • Media ride and drive • Receive EPA certification prior to 2010 launch Controlling Our Destiny 2010 Engine Testing - On Track or Ahead of Schedule 19 |
20 MaxxForce 15L status and strategy Actions in 2009 for 2010 and Beyond 15 Liter 2010 Emission Strategy Current status: • More than 9 months of testing, which includes high-altitude and high-temperature testing • Provide advance production units to strategic customers later this year • Production in late calendar 2010 Actions and product attributes to ensure success in 2010: • Transition some 15L customers to the MaxxForce ® 11L/13L • Significant engine weight savings • Better manage heat rejection • Product testing on/ahead of schedule Today 2009 Transition 2010 Big Bore 11L-15L 11L/13L 46% 15L 54% <425 hp 12% 425-455 hp 64% 475-550 hp 24% MaxxForce ® 11L/13L 330 hp-475 hp @ 1900 rpm 1250-1700 hp lb.–ft. @ 1000 rpm |
21 Summary-2010 Emission Strategy Status 2010 emission strategy on/ahead of schedule • All engines will be between .4 and .5 NOx • Engine durability testing is on track and plan to over-test and stress many parts of the system • In most cases, vehicles will have equal to better fuel economy than 2009 vehicles • Base engine will have less heat than 2009 engines • ProStar ® weight will be reduced by 600 lbs. • MaxxForce ® 13L will have over 1,000 lbs. of weight advantage vs. a competitive 15L SCR engine |
Actions in 2009 Position Us for Success in All End Markets 22 Medium Truck 61% Market Share 3Q 2009 35% Market Share 3Q 2009 33% Market Share 3Q 2009 29% Market Share 3Q 2009 Heavy Truck School Bus Severe Service Truck 2009 Industry: Heavy Day Cab – 16% Heavy Sleeper – 30% |
Actions in 2009 for 2010 and Beyond 2010 Emission Strategy 23 How EGR Technology Works Competitor “A” – announced its Environmental Protection Agency (EPA) 2010 emissions reduction technology using selective catalytic reduction (SCR) will carry a surcharge of $9,600. Competitor “B” – “anywhere from $8,000 to $10,000 is a range that everybody is aware of. There's certainly no secret about that.” Navistar’s strategy is to price competitively. |
Status of Future Technology: Advancing at a Rapid Pace 24 Customer Friendly and Controlled by the OEM Alternative technology advancement to achieve 0.2 NOx 1.In-cylinder Combustion Improvement (EGR approach) a) Advanced fuel system (high injection pressure), air/EGR system, and advanced control, advanced vehicle cooling b) Brake thermal efficiency improvement better fuel economy less heat rejection 2.Advanced NOx after treatment system (Customer friendly and controlled by the OEM) a) Dual function DPF, NOx reduction diesel Particulate filter (“NPF” Navistar naming) with the following options i. Gas ammonia injection ii. Hydrocarbon injection b) Hydrocarbon or Hydrogen Injection - Lean NOx Trap (LNT) 3. Powertrain integration (Hybridization and advanced transmission technology (longer term)) |
Actions in 2009 for 2010 and Beyond Supply Base and Competitor Migration South • Competitor: x • Supplier: OEM Mexico OEM Exited business OEM Consolidated operations Supplier 1 Nuevo Supplier 2 Mexico Supplier 3 San Luis Supplier 4 Texas • Customer Growth in Southern corridor: Escobedo Plant x x x Chatham Plant 25 |
Mahindra J.V. – Vehicles Ready for Launch in Early 2010 26 Bus - #1 leader in school bus Overall commercial vehicle industry (in units) Truck Note: Mahindra FY – April to March Mahindra/Navistar J.V. is a 51% - 49% joint venture 150,000 170,000 190,000 210,000 230,000 250,000 270,000 290,000 310,000 330,000 350,000 FY 2009 Actual FY 2010 Estimate FY 2011 Estimate FY 2012 Estimate |
Actions in 2009 for 2010 and Beyond Caterpillar/Navistar Strategic Alliance/Joint Venture 27 • Strategic alliance to manufacture a heavy-duty Caterpillar vocational truck • Manufactured by Navistar at Garland, TX • Industry dynamics - Market size historically has ranged from 40K to 80K. 1/3 of the market is mid-range diesels (MRD) and 2/3 of the market is heavy-duty diesel (HDD) - Navistar severe service market share in FY08 was 27%. (MRD was 40% and HDD was 13%) Global Commercial Truck Markets Outside of N.A. North America Caterpillar Vocational • 50/50 joint venture for commercial trucks outside of N.A. • Leverages the complementary strengths of both companies - CAT – distribution - Navistar – manufacturing and product development • Initial markets – Australia, Brazil, China, Russia, South Africa and Turkey • First products are expected to be available in fiscal Q1 of 2010 |
28 Transaction Overview: • Acquisition price ~ $47 million, effective June 1, 2009 • Expected revenue of $600 million to $1 billion by end of 2011 • Five manufacturing facilities • All trademarks and intellectual property • Acquiring assets at the lowest point in over 30 years • Goal to be breakeven at lowest industry volumes in cycle and capitalize on upswing as the market returns Type: Class A Monaco has a full line product offering and is a leader in the Class A market Type: Class C Type: Towable Class A Industry Sales Actions in 2009 for 2010 and Beyond Monaco 22 10 14 19 33 42 34 33 41 42 35 29 24 27 32 37 33 37 38 43 49 41 33 40 42 41 37 32 29 16 7 0 5 10 15 20 25 30 35 40 45 50 1979 1986 1993 2000 2007 RVIA: University of Michigan Forecast Baird Research (in thousands) |
29 Truck Leadership Electric Vehicle (EV) – Zero Emission • Received $39 million commitment from Stimulus Act and Technology Funding opportunities to fund our existing plans to be leaders in commercial electric vehicle market • Utilize existing manufacturing facilities (Elkhart County, Indiana), which brings job opportunities • Next steps – finalize J.V. with Modec Ltd., of the United Kingdom Goal is to build 400 all-electric vehicles in 2010 and expect that within a couple of years to be producing several thousand vehicles annually. |
Actions in 2009 for 2010 and Beyond Navistar Environmental Strategy 30 Red Bull Purchases New International ® DuraStar™ Hybrid Delivery Trucks Trucks save 30%-40% fuel costs while reducing CO2 emissions UPS, EPA, Eaton, Navistar Agree: “Hydraulic Hybrid Vehicles Ready for Prime Time” Development Strategy: Provide time for technology progress EPA rewards providers for cleaning up the environment sooner Advanced EGR provides the platform to continued emissions improvement The best technology will continue to improve… Electronics and Control Strategies Advanced Fuel Injection Technology Higher injection pressure 3000 bar Proprietary Combustion Bowl Designs More complete burn Twin turbochargers Air-Management Systems |
Actions in 2009 for 2010 and Beyond Leveraging Our Assets – Midibus and Rest of World Opportunities 31 Rest of World Focus • Capitalize on large market in South America • Emerging market in Mexico driven by government funding Partnership with Neobus • Start of production expected in November • Low cost/high quality design capability • Long-term potential for U.S. and Canada Midibus - Integrated Commercial NOTE: J.V. pending - MOU with San Marino (Neobus) for integrated commercial bus body J.V. assembly plant in Mexico Develop Products to Compete Beyond Yellow 61% Market Share 3Q 2009 School Bus |
32 More than 21K Units invoiced from 2005 through July 2009 Commercial Off The Shelf (COTS) Military Revenue Sustainable at $2 Billion COTS with Military Features True Tactical Wheeled Vehicles |
Recent Foreign Military Sales 33 UK OUVS UK Husky Allied Forces Armored MXT Allied Forces HMMWV Replacement HMMWV Repower Canadian MilCots Canadian SMP RCMP Allied Forces Dash with Additional Variants Allied Forces Dash |
Actions in 2009 for 2010 and Beyond Engine 34 • In the news: Navistar Engine Group to supply V8 diesels to Capacity of Texas Navistar enters engine supply agreement with developer of Daewoo commercial buses GM South America • U.S. and Canada truck growth Big Bore engines EGR strategy • Global opportunities Mahindra Navistar Automotives Limited J.V. Cat/Nav Global Products J.V. • Niche customers Military Marine U.S./Canada Truck Growth Global Opportunities Niche Customers 460,000 Engines - FY13 North America South 11/13L 15L CAT/NAV JV Military Marine Other OEM America Grow engine business from 346K engines in FY08 to 460K by end of FY13 |
35 Controlling Our Destiny Leveraging What We Have and What Others Have Built • Cash and cash flow • Below the line SG&A Post retirement Taxes • Capital structure |
Manufacturing Cash & Cash Flow 36 Note: This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation. ($ in millions) Manufacturing Cash April 30 th ending cash $594 Cash flow from operations (including working capital) $142 Capital spending/investment (Monaco) (87) Other cash flow impacts (fx) 22 Cash flow from manufacturing operations $77 Accounting consolidation of Blue Diamond 80 July 31st ending cash $751 |
SG&A What did we tell you at the beginning of the year? • Year-over-year cost reductions – Other SG&A / fixed costs ~$150M – Professional (filing) fees ~ $100M Where are we today? 37 2009 2008 Change SG&A (excluding items below) $800 $974 ($174) Professional fees 27 138 (111) Post retirement 158 (41) 199 Total SG&A $985 $1,071 ($86) Nine Months Ended July 31, |
Post Retirement Pension & Health Care • Closed plan to new entrants in 2002 – Majority of new entrants closed in 1996 – Annual service cost is decreasing • 2009 higher cost caused by 2008 market decline – Revised investment strategy/investment advisor – July YTD 2009 return 18.5% for pension plan and 20% for OPEB (CY) – Expect cost to improve/neutral • Aggressive cost control, without service cuts (health care) – Cost contained, but too expensive 38 |
Taxes 39 • U.S./Canada – NOL position – full valuation allowance • Foreign operations – normal tax rates Improved business outlook in Brazil more taxes Production shift from Canada to Mexico more taxes One time favorable items – Foreign Operations more taxes Overall 2009 Income tax expense of ~$46M with Ford settlement ~$15M-20M increase in expense in 2009 |
NFC – Primary Purpose is to Help Us Sell Trucks 40 Dealers Retail • Liquidity – Overall $1B – Wholesale - $311M – Retail - $348M – Revolver - $362M • Strategy: – Maintain the value of NFC – Reduce leverage • Refinancing Plan: – Wholesale Renew wholesale VFC – Done Expand capacity for market recovery – Retail Work with banks to improve product offering for customers – In Progress Concentration of customers – Bank Facility/Term Loan Refinance bank facility/term loan to meet strategy – End of Year |
$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2009 2010 2011 2012 Capital Structure 41 Capital Structure NFC $1.4 Due July 2010 Mfg $1.5 Due Jan 2012 • Initial focus on NFC • Balance the alternatives - Cost - Execution/market conditions - Shareholder value |
42 Summary Advanced EGR In-Cylinder NOx Reduction Military sustainable at $2B |
Appendix 43 |
2009 Guidance without Ford settlement effects* 44 Guidance *This slide contains non-GAAP information, please see the Reg G in appendix for detailed reconciliation ($ Millions (excluding EPS)) Truck Industry Units 165K to 185K Revenue $11,000 to $11,500 Mfg. Segment Profit $710 to $735 Below the line items ~$(485) Profit Excluding Tax $225 To $250 Net Income $182 To $207 Diluted EPS $2.55 to $2.85 # of shares ~72M |
NFC Liquidity Remains Strong 45 • NFC had total available undrawn committed funding of $1.0 billion at 7/31/2009 – NFC renewed its $650 million dealer floor plan financing facility on August 26 – NFC has continued to obtain access to bank conduit markets to fund retail note acquisitions; closed $298 million conduit sale in April – NFC on target for refinancing bank revolver by year-end • We expect NFC profitability to rebound in 2009 – Margins improving – Portfolio quality stabilizing for several quarters – Interest rates stabilizing • NFC retail activity primarily funded by facilities that do not require refinancing until 2010 – Over $1.5B in retail notes have been sold and securitized since the subprime issues began to impact the asset securitization market – Serviced receivables balances tracking to truck market trough – Truck financing is available for quality credits, especially conquest accounts Retail Notes Bank Revolver • $500 million revolving warehouse (TRIP) – Acquired notes sold into TRIP – TRIP warehouses, then securitizes via bank conduits • TRIP terms – Matures June 2010 On-balance sheet • $1.4B facility – Initial funding of retail note acquisitions – Also funds dealer/customer open accounts • Revolver terms – Matures July 2010 On-balance sheet Dealer Floor Plan (DFP) • Current situation – ~$850M funding facility (NFSC) – Available $311 million • NFSC terms – Bank conduit portion (VFC) renewed October 2008 – Public portion matures February 2010 Off-balance sheet |
Market Share – U.S. & Canada School Bus and Class 6-8 46 Navistar 1st Q 2nd Q 3rd Q 4th Q Full Year 1st Q 2nd Q 3rd Q 4th Q Full Year 1st Q 2nd Q 3rd Q 4th Q YTD JUL Bus (School) 60% 60% 59% 59% 60% 57% 57% 48% 58% 55% 56% 60% 61% NA 59% Medium (Class 6-7) 37% 34% 34% 37% 36% 34% 35% 39% 35% 36% 30% 39% 35% NA 35% Heavy (LH & RH) 16% 12% 15% 17% 15% 16% 15% 19% 25% 19% 24% 23% 29% NA 25% Severe Service 24% 28% 26% 32% 27% 35% 36% 34% 41% 37% 45% 49% 41% NA 45% Combined Class 8 18% 17% 19% 22% 19% 23% 23% 25% 30% 25% 31% 33% 33% NA 32% Combined Market Share 25% 25% 27% 31% 27% 29% 29% 30% 35% 31% 33% 38% 38% NA 36% Navistar 1st Q 2nd Q 3rd Q 4th Q Full Year 1st Q 2nd Q 3rd Q 4th Q Full Year 1st Q 2nd Q 3rd Q 4th Q YTD JUL Bus (School) 60% 60% 59% 59% 60% 57% 57% 48% 58% 55% 56% 60% 61% NA 59% Medium (Class 6-7) 37% 34% 34% 37% 36% 34% 35% 39% 35% 36% 30% 39% 35% NA 35% Heavy (LH & RH) 16% 12% 15% 17% 15% 16% 15% 19% 25% 19% 24% 23% 29% NA 25% Severe Service 23% 26% 24% 28% 25% 28% 26% 26% 29% 27% 32% 36% 33% NA 34% Combined Class 8 18% 16% 19% 21% 18% 20% 19% 21% 26% 22% 26% 28% 30% NA 28% Combined Market Share 25% 25% 27% 31% 26% 27% 27% 28% 32% 29% 30% 35% 36% NA 33% Market Share - US & Canada School Bus and Class 6-8 2007 2008 2007 2008 2009 2009 |
Truck Shipments 47 Note: Information shown below is based on Navistar’s fiscal year Fiscal Year 2007 1Q07 2Q07 3Q07 4Q07 Full Year 2007 BUS 3,400 4,100 3,200 3,900 14,600 MEDIUM 9,700 6,800 5,600 6,600 28,700 HEAVY 7,000 4,500 2,600 3,300 17,400 SEVERE 3,900 3,300 3,500 3,700 14,400 TOTAL 24,000 18,700 14,900 17,500 75,100 MILITARY (U.S. & Foreign) 600 900 700 1,000 3,200 EXPANSIONARY 9,100 8,700 9,000 8,500 35,300 WORLD WIDE TRUCK 33,700 28,300 24,600 27,000 113,600 Fiscal year 2008 1Q08 2Q08 3Q08 4Q08 Full Year 2008 BUS 3,100 3,300 2,700 4,400 13,500 MEDIUM 3,700 6,300 5,800 4,500 20,300 HEAVY 2,600 3,900 4,500 7,800 18,800 SEVERE 2,400 3,400 3,300 3,700 12,800 TOTAL 11,800 16,900 16,300 20,400 65,400 MILITARY (U.S. & Foreign) 1,600 2,200 2,300 2,600 8,700 EXPANSIONARY 5,900 8,100 8,400 5,700 28,100 WORLD WIDE TRUCK 19,300 27,200 27,000 28,700 102,200 Fiscal year 2009 1Q09 2Q09 3Q09 4Q09 YTD JUL BUS 2,700 3,100 3,500 NA 9,300 MEDIUM 3,200 3,400 2,700 NA 9,300 HEAVY 6,100 3,200 4,500 NA 13,800 SEVERE 2,800 2,700 2,800 NA 8,300 TOTAL 14,800 12,400 13,500 NA 40,700 MILITARY (U.S. & Foreign) 2,500 2,100 1,200 NA 5,800 EXPANSIONARY 2,400 1,900 2,300 NA 6,600 WORLD WIDE TRUCK 19,700 16,400 17,000 NA 53,100 |
World Wide Engine Shipments 48 Navistar 1st Q 2nd Q 3rd Q 4th Q Full Year Ford 60,000 56,200 65,400 53,500 235,100 Other OEM's (All Models) 21,000 26,400 29,100 27,700 104,200 Engine Shipments to Truck Group 23,100 12,100 13,700 16,500 65,400 Total Shipments 104,100 94,700 108,200 97,700 404,700 Navistar 1st Q 2nd Q 3rd Q 4th Q Full Year Ford 47,000 55,300 25,200 24,500 152,000 Other OEM's (All Models) 25,900 31,500 34,100 37,100 128,600 Engine Shipments to Truck Group 12,900 15,700 20,000 16,300 64,900 Total Shipments 85,800 102,500 79,300 77,900 345,500 Navistar 1st Q 2nd Q 3rd Q 4th Q YTD JUL Ford 14,100 29,000 26,200 NA 69,300 Other OEM's (All Models) 22,500 22,200 24,600 NA 69,300 Engine Shipments to Truck Group 14,300 12,700 12,800 NA 39,800 Total Shipments 50,900 63,900 63,600 NA 178,400 2008 2007 2009 |
Order Receipts – U.S. & Canada 49 Percentage 2009 2008 Change Change 3,200 3,400 (200) (6) 2,700 4,400 (1,700) (39) Class 8 heavy trucks 3,800 3,300 500 15 Class 8 severe service trucks* 3,900 7,500 (3,600) (48) 13,600 18,600 (5,000) (27) 7,700 10,800 (3,100) (29) * Includes 1,400 and 3,900 units in the three months ended July 31, 2009 and 2008, respectively, related to military contracts Total Navistar Ended July 31, Three Months Order Receipts: U.S. & Canada (Units) Combined Class 8 (Heavy and Severe Service)* "Traditional" Markets School buses Class 6 and 7 medium trucks |
International Dealer Stock Inventory (Units) * U.S. and Canada Dealer Stock Inventory 50 *Includes U.S. and Canada Class 4-8 and school bus inventory, but does not include Workhorse Custom Chassis inventory. - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Lowest point in over 10 years |
Frequently Asked Questions 51 Q1: What should we assume for capital expenditures in 2009? A: For 2009, excluding our NFC and Dealcor acquisition of vehicles for leasing, we expect our capital expenditures to be below our normal $250 million to $350 million range. We continue to fund our strategic programs. Q2: What is in your Dealcor debt? A: Dealcor debt is comprised of wholesale (floor plan) financing and also retail financing on lease and rental fleets. Q3: How many Dealcor dealers did you have as of July 31, 2009? A: Of our 288 primary NAFTA dealers, we have ownership interest in 19 Dealcor dealers as of July 31, 2009. We expect to have fewer Dealcor dealers on October 31, 2009. Q4: Have you seen any year-over-year steel, precious metals and resin cost increases in 2009? A: Direct material costs have been impacted by industry-wide price increases in commodities, which affected all of our operations excluding financial services. Costs related to steel, precious metals, resins, and petroleum products decreased by $6 million and increased by $58 million during the quarter and nine months ended July 31, 2009, respectively, as compared to an increase of $22 million and $42 million for the same respective periods in 2008 and a total increase of $97 million during the twelve months ended October 31, 2008. This is the first quarter we had a benefit of the decline in commodity prices, although year-to-date our Truck and Engine segments were not able to fully capitalize on some cost saving opportunities due to existing contractual obligations. |
Frequently Asked Questions 52 GCWR and have added a WorkStar ® 4x4 to our product offerings. Beyond our DuraStar™ and WorkStar ® hybrid electric products, we are continuing to look at and test other Q5: What is the status of your hybrid program? A: Navistar is currently in full on-line production of DuraStar™ class 6 & 7 hybrid electric models at our Springfield Assembly plant. This hybrid product is demonstrating 30-60% improvement in fuel economy and has been EPA certified to receive tax credits. We have received 500 orders to date and have raised our production capacity to 5 units a day to meet the increasing demand. In addition we offer a plug in hybrid IC Bus product. We recently released a new beverage tractor application at 55,000 pounds viable platforms such as the delivery of 7 hybrid hydraulic Workhorse package car chassis to UPS. This system uses hydraulic pressure in lieu of electricity to operate the hybrid system. They are showing promise of over 50% improvement in fuel economy. Other hybrid platforms are in development for Class 8 products of the future. The result of this new hybrid technology will be to substantially improve fuel efficiency and reduce the carbon footprint of our truck and bus products of today and in the future. Navistar has been successful in securing a U.S. Department of Energy (DoE) cost share award of up to $10 million—half of the total projected cost, to develop the next generation of Hybrid School. As part of the Plug-in Hybrid Electric Vehicle (PHEV) Technology Acceleration And Deployment Activity program, Navistar will deploy 30 plug-in electric hybrid buses to fleets across the nation during a multi-year program. |
Frequently Asked Questions 53 Q6: The future of diesel transportation is being impacted by environmental and energy issues such as fuel efficiency, climate change and clean air. How is Navistar responding to these growing influences? A: Navistar and its production units are fully engaged and are offering solutions on multiple fronts to the commercial truck industry. Aerodynamic efficiency is the single most important issue to address to improve the fuel economy of on-highway trucks. International development in wind tunnels and work hard to achieve industry-leading aero-efficiency. And our recently introduced of aero-efficiency among premium Class 8 trucks. Another significant reduction in both fuel consumption and emissions can be achieved by reducing idle time of on-highway trucks. Navistar was the first OE manufacturer to offer a fully integrated no idle HVAC when the MaxxPower™ Battery Powered HVAC launched earlier this year. The MaxxPower™ Battery Powered HVAC allows drivers to operate the truck HVAC system while consuming 80% less fuel than idling the main engine. We also believe hybrid technology will be a large part of the national response to climate change and fuel use and we are raising our role as a contributor to energy efficient transportation solutions in the commercial truck, commercial bus and school bus businesses. We are leveraging the natural fuel efficiency of diesel engines and vehicles in several key moves. We are building on our record as the leader in Green Diesel Technology, where Navistar set the pace for the industry in achieving this year’s historically low emission requirements. We have advanced the standard of efficiency with our new Navistar was recognized for leadership in the development of hybrid advanced technology in California, receiving the Blue Sky Award for 2007 from WestStart-CALSTART. Navistar received a $39M commitment from the DoE to develop and deploy up to 400 Class 3 Electric Vehicles over the next two years. Each of these EVs will reduce the amount of carbon released to the atmosphere by up to ten tons if compared with an internal combustion engine vehicle in a similar duty cycle. Navistar also received $4M in funding from the California Energy Commission to demonstrate its EV technology in CA. While in the early stages of development, these two programs will establish Navistar as a leader in the commercial EV market. ® ProStar ® is the industry's most aerodynamic and fuel efficient Class 8 truck. We do extensive International ® LoneStar ® , the first ever owner/operator product that is SmartWay certified, is setting a whole new standard ProStar ® truck. And we are well into the important wave of customer interest in hydraulic and electric hybrids which will have a substantial impact on the reduction in greenhouse gas emissions. |
Frequently Asked Questions 54 Q7: What do you finance at Navistar Finance Corporation (NFC)? A: NFC is a commercial financing organization that provides wholesale, retail and lease financing for sales of new and used trucks and buses sold by the company. NFC also finances the company’s wholesale accounts and selected retail accounts receivable. Sales of new truck related equipment (including trailers) of other manufacturers are also financed. Q8: What percentage of truck purchases do you fund? A: We consistently fund about 95% of floor plan inventory for our dealers in the U.S. and approximately 9% of retail purchases. Q9: When is the next refinancing due at NFC? A: Our TRAC facility, which we use to finance fleet and national accounts, was extended in July and is due for renewal in November 2009. Q10: Why did you extend the TRAC renewal for three months? A: We are re-evaluating that deal structure in light of other funding activities underway for NFC and Navistar. We have done similar extensions in the past, so this is nothing new or noteworthy. Q11: Why did you renew your wholesale financing facility at a lower amount? A: We renewed $650 million, compared to $800 million last year. We have maintained over $300 million of excess wholesale capacity throughout fiscal year 2009, and we believe that $650 million is sufficient to support our current wholesale needs. The need has changed because dealers are stocking less inventory because of the low demand for trucks in today’s economy. |
Frequently Asked Questions 55 Q12: Why did you amend the intercompany agreement? A: We amended the intercompany agreement to allow more flexibility to NFC and Navistar by allowing NFC to purchase short-term trade receivables that were previously not included in the agreement or that the TRAC deal did not permit NFC to purchase. Q13: How do you fund retail notes? A: Retail notes are primarily funded by a bank revolver and a revolving warehouse facility that we call TRIP, which doesn’t mature until 2010. These notes are ultimately sold to either a conduit facility or into a public securitization. Q14: Are there any requirements for NFC leverage? A: NFC is compliant with our revolver leverage covenant of 6 to 1. This ratio calculation excludes qualified retail and lease securitization debt. Q15: How are your securitization rates determined? A: Portfolio performance, deal structure and market conditions affect pricing, as well as the type of asset being financed (for example dealer floor plan inventory versus a customer purchase). Q16: What is your funding strategy? A: We use three or four primary funding sources. For longer-term retail truck notes that finance the sale of trucks to end customers, we finance those in the term securitization markets in either public or private deals. We primarily finance our wholesale portfolio in traditional private or public securitizations. We also have a combination of revolving type facilities that often warehouse assets until they can be financed permanently. |
Frequently Asked Questions 56 Q17: How is your NFC portfolio performing? A: The portfolio is performing as we would expect given the industry downturn and consistent with prior cycles. The provision for credit losses increased from approximately $20 million in FY07 to $32 million in FY08. During our first three quarters of FY09, our provision for credit losses dropped to $21.5 million. Q18: How are your repossessions trending? A: Repossessions were slowing down at the end of FY08, and our rate of repossession has significantly declined throughout FY09. Q19: How are your dealers doing? A: We think our dealers, which have always been one of our strengths, are well positioned. We traditionally have not had any significant dealer losses and expect that trend to continue in the future. Q20: Are your customer interest rates going to increase? A: Like all lenders, we need to achieve a profitability threshold to ensure our continued access to capital, and that means pricing our rates in line with the marketplace. So, yes, as the cost of financing has increased for all companies, we have passed on some of the cost increase to our dealers and customers. Q21: What kind of rates do you charge your dealers and customers? A: Generally, our rates vary (those with higher credit risk have always had to pay higher interest rates) and are usually in line with the market. |
Frequently Asked Questions 57 Q22: How do you make your credit decisions? Do you require a certain credit score? A: We factor in a variety of criteria in our credit scoring model such as business model, company history, down payment, etc. Q23: What is your total amount of capacity at NFC? A: Total availability in our funding facilities is more than $1.0 billion as of July 31, 2009. Q24: Are you able to take advantage of any TALF or TARP money? A: We are evaluating accessing TALF funding, if appropriate, when we issue our next public or private 144A transaction. Q25: How does your derivative expense compare to last year? A: Our derivative expense for the first three quarters of 2009 was $36 million, which compares favorably to our derivative expense of $40 million in the first three quarters of 2008. Q26: How do your repossession percentages compare to the overall size of your portfolios? A: Repossessions as a percent of retail balances were approximately 4.5% for FY08 and 3.2% for the first three quarters of FY09. Q27: What is the current JLTV status? A: Navistar and BAE are moving forward with the technology development phase of the program. Australia has expressed interest in participating and has plans to purchase test units from the three JLTV teams. |
Frequently Asked Questions 58 Q28: What is the status of the 2010 Department of Defense budget and how might it affect the request for trucks and tactical vehicles? Will FMTV be affected? A: The defense appropriation bill has been completed by the House. It will be taken up by the Senate appropriation committee when they return from the August recess on Sept. 8. It is highly unlikely that the Defense bill will be completed by October 1st, the beginning of the fiscal year. It will go under a continuing resolution similar to the rest of the appropriation bills. However, the House has supported most of the tactical vehicle funding requested. The administration requested $5.7B for Army Tactical and Support Vehicles. The House approved $5.25B. FMTV was reduced $193M because of the timing of the contract award. FHTV was similarly reduced $129M because of the delay until FY11 of the Heavy Equipment Transporter System (HETS) tractor contract. The Mine Protection Vehicle Family line was reduced by $134.7M because the need can be met with MRAP vehicles coming out of Iraq. The MRAP request of $3.6B was reduced by $1.8B because it had been forward funded in the 09 Supplemental. JLTV is fully funded in both the Army and Marine Corps accounts at $32M and $58M respectively. Q29: What is the current timeline for the OUVS program? How many vehicles are expected? A: The U.K. Ministry of Defence has postponed the Operational Utility Vehicle Systems (OUVS) program to review spending plans for 2010. In October 2008, Navistar was selected for both the OUVS Large and OUVS Small categories. Q30: Is the Husky Tactical Support Vehicle (TSV) for the United Kingdom the same as Navistar’s vehicle submitted for the U.S. M-ATV program? A: No, the Husky was developed according to U.K. specifications. |
Frequently Asked Questions 59 Q31: When will there be a resolution to the FMTV (Family of Medium Tactical Vehicles) protest filing? A: Filings with the Government Accountability Office (GAO) usually require 90 to 100 days for review. Navistar filed its protest on September 3. Q32: What are the 2010 emissions requirements? A: The rules allow manufacturers to go to .5 NOx if they clean up the environment earlier with advanced technology; manufacturers need to be at .2 NOx if they choose not to introduce advanced technologies earlier. Q33: Has the recent tax legislation, The American Recovery and Reinvestment Act of 2009, affected Navistar? A: Two of the business tax incentives have a direct effect on Navistar: A) The legislation provides for additional depreciation deductions equal to 50% of the cost of non-real property fixed assets placed in service during calendar year 2009. B) In lieu of claiming the additional depreciation deductions described in (A) above, the legislation would allow Navistar to accelerate the realization of tax credits earned in prior years. Navistar intends to accelerate the realization of tax credits earned in prior years. The amount expected to be realized is immaterial to the Company’s financial statements. |
Frequently Asked Questions 60 60 Q34: A: How will President Obama’s recent tax proposals impact Navistar, if enacted as currently proposed? The President’s proposals will have far reaching implications for multinational companies, such as Navistar. In the near term we would not anticipate a material adverse impact due to the fact that we currently have a full valuation allowance against a large portion of our deferred tax assets and are still utilizing U.S. net operating losses. Over the long term we would anticipate adverse U.S. tax implications for our international businesses, requiring actions to be taken by Navistar to address these implications. Deferral of deductions deemed related to unremitted foreign earnings Limitations on the use of disregarded entities in foreign jurisdictions Limitations on foreign tax credits Why is our tax expense so high for the quarter relative to pre-tax income? While our pre-tax operating profit reflects the net effect of worldwide operations, our tax expense reflects differences in U.S. and foreign operations. In general, our U.S. operations incur tax expense limited to current state taxes and AMT, because of the full valuation allowance position we have against deferred tax assets. At the end of FY 2008 we also attached a full valuation allowance to our deferred tax assets in Canada. Consequently, losses incurred in Canada during FY 2009 receive no tax benefit. Finally, our Brazilian and Mexican operations improved significantly from Q2 to Q3, and are fully taxable. This confluence of events coupled with certain discrete items in the quarter contributed to the unusual relationship between pretax income and tax expense in Q3. Q35: A: Certain material proposals impacting multinational corporations include: |
Frequently Asked Questions 61 61 Q36: Your tax footnote in the 10K discloses gross deferred tax assets of $2.1 billion. How will those assets be used to offset future taxable income? A: The most commonly understood component of deferred tax assets is the value of our net operating losses, which was reported as $393 million as of 10/31/08. We continue to offset current taxable income by these net operating losses both in the U.S. for federal and state tax purposes and in Canada and Brazil. In addition, we have several other major components of deferred taxes which will reduce taxable income in the future. For example, to date the Company has accrued OPEB, pension and other employee benefit liabilities during prior years. As those payments are made to employees, the company will realize a deduction against its future taxable income. Similarly, the Company has accrued significant reserves for warranty and product liability obligations. As payments are made against those reserves the Company will realize a deduction against its future taxable income. |
Manufacturing Cash Flow 62 ($ in millions) Note: This slide contains non-GAAP information, please see the Reg G in appendix for detailed reconciliation Goal Three Months Ended July 31st Beginning Mfg. Cash 1 Balance 10/31/2007 10/31/2008 10/31/2009 2008 2009 2009 October 31, 2006 $1,214 October 31, 2007 $722 $722 October 31, 2008 $777 $777 April 30, 2009 $594 Approximate Cash Flows: From Operations ($231) $414 ++ $78 $129 $142 Dividends from NFC $400 $15 n/a $15 $0 $0 From Investing / (Cap Ex) ($70) ($216) - ($160) ($190) ($87) Marketable Securities ($130) ($4) ($2) $12 ($2) $0 From Financing / (Debt Paydown) ($480) ($133) - ($94) ($51) $8 Exchange Rate Effect $19 ($21) n/a $3 $8 $14 Blue Diamond Consolidation $0 $0 $80 $0 $80 $80 Ending Mfg. Cash 1 Balance: October 31, 2007 $722 July 31, 2008 $576 October 31, 2008 $777 July 31, 2009 $751 $751 October 31, 2009 $650 - $750 1 Cash = Cash, Cash Equivalents and Marketable Securities Nine Months Ended July 31 |
SEC Regulation G 63 This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting, giving effect to the adjustments shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above reconciliations and to provide an additional measure of performance. (Unaudited) DEBT YE 2005 YE 2006 YE 2007 YE 2008 2009 - 3Q (in millions) Manufacturing operations January 2007 Loan Facility (Libor + 325 matures January 2012) - $ - $ 1,330 $ 1,330 $ 1,330 $ Bridge Loan Facility (Libor + 500) - 1,500 - - - Financing arrangements and capital lease obligations 408 401 369 306 278 6.25% Senior Notes 400 - - - - 9.375% Senior Notes 393 - - - - 7.5% Senior Notes, due 2011 249 15 15 15 15 Majority owned dealership debt 245 484 267 157 162 4.75% Subordinated Exchangeable Notes, due 2009 202 1 1 1 - 2.5% Senior Convertible Notes 190 - - - - 9.95% Senior Notes, due 2011 13 11 8 6 4 Other 24 60 39 19 17 Total manufacturing operations debt 2,124 2,472 2,029 1,834 1,806 Financial services operations Borrowing secured by asset-backed securities, at variable rates, due serially through 2016 2,779 $ 3,104 $ 2,748 $ 2,076 $ 1,439 $ Bank revolvers, at fixed and variable rates, due dates from 2010 through 2013 838 1,426 1,354 1,370 1,259 Revolving retail warehouse facility, at variable rates, due 2010 500 500 500 500 500 Commercial Paper, at variable rates, due serially through 2010 - 28 117 162 75 Borrowing secured by operating and finance leases, at various rate, due serially through 2016 148 116 133 132 128 Total financial services operations debt 4,265 $ 5,174 $ 4,852 $ 4,240 $ 3,401 $ (Unaudited) Cash & Cash Equivalents YE 2005 YE 2006 YE 2007 YE 2008 2009 - 3Q Manufacturing non-GAAP (Unaudited) 776 $ 1,078 $ 716 $ 775 $ 751 $ * Financial Services non-GAAP (Unaudited) 53 79 61 86 70 Consolidated US GAAP (Audited) 829 $ 1,157 $ 777 $ 861 $ 821 $ Manufacturing Cash & Cash Equivalents non-GAAP (Unaudited) 776 $ 1,078 $ 716 $ 775 $ 751 $ * Manufacturing Marketable Securities non-GAAP (Unaudited) 91 136 6 2 - Manufacturing Cash, Cash Equivalents & Marketable Securities non-GAAP (Unaudited) 867 $ 1,214 $ 722 $ 777 $ 751 $ *Includes increase in cash and cash equivalents from consolidating Blue Diamond Truck and Blue Diamond Parts (Audited) |
SEC Regulation G 64 This regulation G slide corresponds with the data found in the chart on slide 15 U.S. and Canada industry 165K 185K Sales and revenues, net $11.5 $12.0 Manufacturing segment profit (excludes asset impairment, Ford settlement, & related charges) $350 $450 Asset impairment, Ford settlement, & related charges Manufacturing segment profit $350 $450 Below the line items ($500) ($330) Income (Loss) before income tax $1,100 $1,270 ($170) ($70) NA $15+ ($Millions) ($Millions) $1,600 Target @ Current Industry 414.5K ($Billions) ~($520) $1,600 NA ($Billions) FY 2009 Guidance on $1.6B Mfg Segment Profit Line Original Target @ 414.5K Industry |
SEC Regulation G – Quarterly Comparison 65 This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting, giving effect to the adjustments shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above reconciliations and to provide an additional measure of performance. FY08 Q3 FY07 Q3 Non GAAP As Reported As Reported As Reported Without Ford Settlement Ford Settlement Impacts With Ford Settlement U.S. and Canada industry ($Billions) ($Billions) ($Billions) ($Billions) Sales and revenues, net $2.5 $2.5 $4.0 $3.0 ($Millions) ($Millions) ($Millions) ($Millions) ($Millions) Manufacturing segment profit * (excludes asset impairment, Ford settlement, & related charges) $92 NA $92 $483 $115 Asset impairment, Ford settlement, & related charges NA $18 $18 ($10) NA Manufacturing segment profit * $92 $18 $110 $473 $115 Below the line items ($92) $0 ($92) ($132) ($110) Income (Loss) excluding income tax $0 $18 $18 $341 $5 Income tax benefit (expense) ($30) $0 ($30) ($10) ($9) Net income (loss) ($30) $18 ($12) $331 ($4) Diluted earnings (loss) per share ($'s) ($0.42) $0.26 ($0.16) $4.47 ($0.05) Weighted average shares outstanding: diluted 70.8M 70.8M 70.8M 74.0M 70.3M Memo - professional fees included in below the line items ($6) ($6) ($27) ($54) * Includes: minority interest in net income of subsidiaries of ($7)M, net of tax; extraordinary gain of $23M, net of tax FY09 Q3 |
SEC Regulation G – Fiscal Year Comparison 66 This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting, giving effect to the adjustments shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing business. Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above reconciliations and to provide an additional measure of performance. FY 2008 FY 2007 FY 2006 Estimated As Reported As Reported As Reported Ford Settlement Impacts U.S. and Canada industry 165K 185K 165K 185K ($Billions) ($Billions) ($Billions) Sales and revenues, net $11.0 $11.5 $11.0 $11.5 $14.7 $12.3 $14.2 ($Millions) ($Millions) ($Millions) ($Millions) Manufacturing segment profit * (excludes asset impairment, Ford settlement, & related charges) $710 $735 NA $710 $735 $1,114 $426 $838 Asset impairment, Ford settlement, & related charges ~ $175 ($395) NA NA Manufacturing segment profit * $710 $735 $175 $885 $910 $719 $426 $838 Below the line items $0 ($528) ($499) ($443) Income (Loss) excluding income tax $225 $250 $175 $400 $425 $191 ($73) $395 Income tax benefit (expense) ~ ($3) ($57) ($47) ($94) Net income (loss) $182 $207 $172 $354 $379 $134 ($120) $301 Diluted earnings (loss) per share ($'s) $2.55 $2.85 $2.40 $4.95 $5.25 $1.82 ($1.70) $4.12 Weighted average shares outstanding: diluted ~72M 73.2M 70.3M 74.5M Memo - professional fees included in below the line items ($40) ($30) ($40) ($30) ($154) ($224) ($70) * Includes: minority interest in net income of subsidiaries of ($7)M, net of tax; extraordinary gain of $23M, net of tax ~72M ~72M ~($485) ~($43) ~($46) ($Millions) ($Millions) ($Billions) ($Billions) FY 2009 Non GAAP Goal Goal Without Ford Settlement With Ford Settlement ~($485) NA ~$175 |